FEDERAL COURT OF AUSTRALIA

Australian Competition & Consumer Commission v Shell Co of Australia Ltd [1999] FCA 212

PROCEDURE - subpoena - whether subpoena issued to party oppressive - whether subpoena amounts to application for further and better discovery - whether ought to be set aside.

PROCEDURE - costs - whether party successful in interlocutory proceeding ought to be at liberty to tax and collect costs immediately.

Federal Court RulesO 27 r 9;  O 62 r 3

Southern Pacific Hotel Services Inc v Southern Pacific Hotel Corporation Ltd [1984] 1 NSWLR 710 cited

Spencer Motors Pty Ltd v LNC Industries Ltd [1982] 2 NSWLR 921 cited

Greyhound Australia Pty Ltd v Deluxe Coaches Pty Ltd (1986) 11 FCR 592 referred to

Lucas Industries Ltd v Hewitt (1978) 45 FLR 174 cited

Commissioner for Railways v Small (1938) 38 SR (NSW) 564

Diddams v Commonwealth Bank of Australia [1998] FCA 497 applied

Mulley v Manifold (1959) 103 CLR 341 referred to

Kizon v Palmer (1997) 75 FCR 261 cited

Kizon v Palmer [1998] FCA 312 referred to

Finnie v Dalglish (1982) 1 NSWLR 400 cited

National Employers’ Mutual General Association Ltd v Waind and Hill [1978] 1 NSWLR 372 cited

Trade Practices Commission v Arnotts Limited (1989) 88 ALR 90 applied

Australian Competition & Consumer Commission v Australian Safeway Stores Pty Limited & Ors [1998] FCA 1599 referred to

AUSTRALIAN COMPETITION AND CONSUMER COMMISSION v THE SHELL COMPANY OF AUSTRALIA LIMITED ACN 004 610 459

QG194 OF 1996

COOPER J

BRISBANE

11 MARCH 1999

THE COURT ORDERS THAT:

1.         The subpoena filed by the applicant on 14 May 1998 directed to the respondent be set aside.

2.         The applicant pay the respondent’s costs of and incidental to the respondent’s notice of motion filed 24 July 1998 to be taxed if not agreed.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

Introduction and background

1                     The respondent, The Shell Company of Australia Limited (“Shell”) by notice of motion filed 24 July 1998 seeks, pursuant to O 27 r 9 of the Federal Court Rules, to set aside a subpoena directed to Shell issued by the applicant, the Australian Competition and Consumer Commission (“the ACCC”) filed on 14 May 1998.

2                     By its amended application filed 14 January 1997 the ACCC seek orders pursuant to s 87(1A) of the Trade Practices Act 1974 (Cth) (“the TPA”) for the payment by Shell to Deramone Pty Ltd and Mr and Mrs Bird (“the Birds”), the amount of loss or damage said to be suffered by those parties by conduct of Shell alleged to contravene s 51AA, s 52, s 53, s 53A and s 59 of the TPA.  The ACCC seek declarations, pursuant to s 21 of the Federal Court of Australia Act 1976 (Cth), that the conduct of Shell amounted to contravention of those sections.  The ACCC also seek orders restraining Shell from engaging in conduct said to be in contravention of those sections.

3                     The action concerns the purchase and operation of a Shell franchise service station at Benowa in Queensland (“the Benowa franchise”) by the Bird and their company, Deramone Pty Ltd (“Deramone”).  The ACCC allege that in reliance (paragraph 6 of the amended statement of claim) upon representations made by Shell, through its employee Mr Llora, the Birds caused Deramone to purchase the business on 12 November 1993 from the previous franchisee, Clearcove Pty Limited and ASI Investments Pty Limited, and on 13 November 1993 to enter an assignment of the franchise.  The Birds also provided personal guarantees in support of Deramone’s obligations under the agreements.  The Benowa franchise was for a term of one year with an option for a further five years.

4                     Paragraph 5 of the amended statement of claim sets out the alleged representations :-

“5.       On or about 28 October 1993 Llora for and on behalf of Shell represented to Mr and Mrs Bird that :

(i)        a reasonable price for the Benowa franchise would be between $325,000 and $375,000 for goodwill and franchise fee plus stock;

(ii)       that such a price would require an additional five year lease to substantiate it;  and

(iii)      providing they performed satisfactorily as operators they would be granted a further five year option to extend the Benowa franchise in addition to the existing one year with a five year option (‘the representations’).”

5                     It is alleged that the Birds and Deramone satisfactorily operated the Benowa franchise (paragraph 7 of the amended statement of claim).  It is alleged that at the time of making the representations in paragraph 5, Shell did not have reasonable grounds for making the representations, did not intend to make good the representations, and did not intend to grant a further five year option at the expiration of the initial term (paragraph 8).  This conduct is said to be misleading or deceptive by reason of s 51A and in contravention of s 51 of the TPA (paragraphs 9, 11 and 12).  The Birds and Deramone are said to have suffered loss or damage by incurring expenses and paying monies they would not otherwise have done (paragraphs 10 and 13).

6                     The ACCC also allege that the representations were made in connection with the supply of goods and services and in contravention of s 53(g) of the TPA (paragraphs 14 - 17), were made in connection with the grant of an interest in land and in contravention of s 53A of the TPA (paragraphs 18 - 21) and were made regarding business activities requiring work and investment of money in contravention of s 59(2) of the TPA (paragraphs 22 - 26).

7                     In paragraphs 27 - 35 of the amended statement of claim the ACCC allege that Shell exerted commercial pressure on the Birds and Deramone, including refusing to grant a further franchise that included a five year option, to cause the Birds and Deramone to sell the Benowa franchise to Shell in December 1994 at a significant under-value.  This is said to have been unconscionable and in contravention of s 51AA of the TPA.

8                     In paragraphs 36 - 43 the ACCC allege in the alternative that Shell granted, in October 1994, to the Birds and Deramone a further franchise from 1 January 1995 to 31 December 1999 that did not contain a five year option and that Shell used commercial pressure to achieve this.  It is alleged that the absence of a further five year option reduced the value of the Benowa franchise.  This conduct is said to be unconscionable and in contravention of s 51AA of the TPA.

9                     On 1 August 1995 Deramone gave notice of termination of the further franchise and the franchise was surrendered, it is alleged, at a significant undervalue.

Interlocutory steps

10                  The litigation has been subject to continual management.  On 21 February 1997 a timetable for delivery of pleadings and discovery/inspection of documents was set, running until 4 April 1997.  The ACCC’s list of documents was provided on 27 May 1997 and Shell’s on 10 June 1997.

11                  On 15 August 1997 Mr Thomas Llora attended court in response to a subpoena issued by the ACCC (the “Llora subpoena”).  The Llora subpoena sought production of the following documents :-

“1.       All file notes and memoranda prepared for, subsequent to or during any attendance upon or conversation with Mr John Bird and/or Mrs Karen Bird since July 1993.

2.         All documents including but not limited to all memoranda, notes, diary notes, correspondence or other such documentation dated from July 1993 and relating to the transfer of the Shell Benowa Service Station and franchise to Deramone Pty Ltd and/or Mr John Bird and Mrs Karen Bird.

3.         All documents including but not limited to all memoranda, notes, diary notes, correspondence or other such documentation dated from July 1993 and relating to the operation of the Shell Benowa Service Station and Franchise by Deramone Pty Ltd and/or Mr John Bird and Mrs Karen Bird.”

12                  Mr Llora was sworn and cross-examined by the ACCC’s solicitor.  Mr Llora stated that he did not hold any documents as all documents had been returned to Shell on termination of his employment.  The subpoena was discharged.

13                  A dispute between the parties concerning discovery of documents resulted in the ACCC filing, on 1 September 1997, a notice of motion seeking supplementary discovery from Shell.  The motion sought orders requiring Shell to discover the following documents :-

“(a)     Diary notes of Mr Thomas Llora noting attendances upon Mr John Bird and Mrs Karen Bird from September 1993 onwards;

(b)       Notes, correspondence, memoranda or any other document with respect to the application and assessment of Mr and Mrs Bird and/or Deramone Pty Ltd as potential franchisees of Shell Benowa Self Serve;

(c)        Notes, correspondence, memoranda and any other document with respect to the consideration by the Respondent of the conversion of petrol station sites in the Gold Coast region, including the Shell Benowa Self Serve site, into Multiple Site Operations from January 1993 onwards;

(d)       The counterpart copy of the document entitled ‘Offer to Renew’ executed for and on behalf of the Respondent on 4 October 1994 and signed by Mr Bird on 30 December 1994, notes, correspondence, memoranda and any other document with respect to the renewal of the franchise agreement between the Respondent and Deramone Pty Ltd expiring 31 December 1994;

(e)        Notes, correspondence, memoranda and any other document with respect to the Respondent’s acquisition of the Shell Benowa Self Serve petrol station from Deramone Pty Ltd and/or the termination of the franchise agreement between the Respondent and Deramone Pty Ltd commencing 1 January 1995.”

14                  The solicitors for the ACCC had requested Shell’s solicitors to discover these documents, in a letter dated 11 August 1997.  The ACCC’s solicitors were not satisfied with Shell’s solicitors’ response, which was a letter from Minter Ellison to the Australian Government Solicitor (“the AGS”) dated 21 August 1997.  That response said, in part :-

“Our client is unable to file and serve a Supplementary List of Documents in the form set out in paragraph 2 of your letter for the following reasons (corresponding to the lettered sub-paragraphs of paragraph 2 of your letter):

(a)       Our client instructs that it has no diary notes kept by Thomas Llora of the kind described in paragraph 2(a) of your letter;

(b)       Other than the documents numbered 2 and 3 in Part 1 of Schedule 1 of our client’s List of Documents filed 10 June 1997, we are instructed that there are no further documents of the kind described in paragraph 2(b) of your letter;

(c)        The documents referred to in paragraph (c) of your letter do not relate to any matter in question between the parties, except, arguably, whether the allegation that our client represented to Mr and Mrs Bird on 6 December 1994 that Shell wanted to purchase the Benowa franchise and convert the Benowa franchise into a multi-site franchise is made out.  Documents relevant in this way would pertain to that franchise in particular and must necessarily pre-date 6 December 1994.  Our client instructs that there are no such documents to be disclosed.  Your client is well aware that to use these proceedings as a fishing exercise would be an abuse of process;

(d)       Other than the documents numbered 5, 6, 33, 34 and 45 in Part 1 of Schedule 1 of our client’s List of Documents filed 10 June 1997, our client instructs that it does not have and has not had in its possession, custody or power any documents of the kind described in paragraph 2(d) of your letter;  and

(e)        Other than the documents numbered 7 - 12 (inclusive), 39, 45, 49, 51, 52, 66, 67, 70, 73, 75, 77 - 81 (inclusive), 83 - 88 (inclusive) 90, 92, 95 102, 103, 104, 107, 109, 110, 112, 113, 114, 116, 121, 124, 127 and 129, our client instructs that it does not have nor has had in its possession, custody or power any other documents of the kind described in paragraph 2(e) of your letter.

Notwithstanding the above, and the thorough searches that have already been undertaken by our client, we have again asked our client to check for further documents in relation to the matters in question in these proceedings.

.....”

15                  The response from Shell’s solicitors also requested the ACCC to provide its own supplementary discovery.  The ACCC did so on 1 September 1997.  On 2 September 1997 the AGS wrote to the Court and requested the notice of motion for supplementary discovery be held “in abeyance”.  On 30 September the AGS advised the Court that the ACCC did not require the motion to be listed but did require the matter to be listed for directions to ready it for trial.

16                  On 3 October 1997 Shell filed a supplementary list of documents.  Also on that date I made directions requiring filing of affidavits of evidence.  Subsequently, in November 1997, the AGS indicated an intention to seek leave to amend the statement of claim to add a new cause of action, and to extend the timetable for delivery of pleadings and affidavits of evidence.  Orders were made in December 1997 by consent, and again in February 1998 by consent, extending the earlier orders.  The timetable contemplated completion of all steps necessary before listing the matter for trial by 6 April 1998.

17                  On 7 April 1998 the AGS advised the Court that it considered the matter ready for trial and estimated a hearing time of five days.  The AGS also foreshadowed the issuing of a notice to produce.

18                  On 8 April 1998 Shell’s solicitors, Minter Ellison, advised that they considered the matter ready for hearing subject to the issuing of a non-party subpoena and the resolution of the issue of the extent to which the ACCC “intends to prove loss or damage at the hearing for injunctive relief”.

19                  On 22 April 1998 the AGS filed a notice to produce.  This notice required production of documents in the same terms as the schedule to the subpoena in issue.  The solicitors for the ACCC attempted to have the notice to produce made returnable before the Court prior to the matter being listed for trial.  The Deputy District Registrar advised the solicitors for the ACCC that this procedure was not available.  As a result the subpoena in question was filed and served on the solicitors for Shell. 

The subpoena

20                  The ACCC seek production of a number of categories of documents as detailed in the schedule to the subpoena (the “schedule”):-

“(1)     Copy and/or original diary notes of Mr Thomas Llora noting attendances upon Mr John Bird and Mrs Karen Bird from September 1993 onwards;

(2)       Copy and/or original notes, correspondence, memoranda and any other document with respect to the application and assessment of Mr and Mrs Bird and/or Deramone Pty Ltd as potential franchisees of Shell Benowa Self Serve;

(3)       Copy and/or original notes, correspondence, memoranda, reports, studies, analyses, minutes and any other document with respect to the decision of the Respondent to convert petrol station sites in the Gold Coast region, including the Shell Benowa Self Serve site, into Multiple Site Operations from January 1993 onwards and the means by which such a conversion was to occur;

(4)       The original counterpart copy of the document entitled “Offer to Renew” executed for and on behalf of the Respondent on 4 October 1994 and signed by Mr Bird on 30 December 1994;

(5)       Original and/or copy notes, correspondence, memoranda and any other document with respect to the renewal of the franchise agreement between the Respondent and Deramone Pty Ltd expiring 31 December 1994;

(6)       Original and/or copy notes, correspondence, memoranda, files, reports, studies, analyses, minutes and any other documents with respect to the Respondent’s purchase of the Shell Benowa Self Serve petrol station from Deramone Pty Ltd;

(7)       Original and/or copy records, file notes, memoranda, correspondence, minutes of meetings and any other document with respect to any offer or offers made or to be made by the Respondent to purchase the Shell Benowa Self Serve petrol station from Deramone Pty Ltd;

(8)       Original and/or copy invoices, memoranda, file notes and any other record or document evidencing payment of moneys by the Respondent to Deramone Pty Ltd with respect to the purchase of the Shell Benowa Self Serve petrol station;

(9)       Original and/or copy records, file notes, memoranda, correspondence or other record or document in relation to the employment of Mr Llora by the Respondent including but not limited to any employment file maintained by the Respondent in relation to the employment of Mr Llora;

(10)     Original and/or copy records, file notes, memoranda, correspondence or other record or document recording visits by employees of the Respondent to the Shell Benowa Self Serve site while that site was operated by Deramone Pty Ltd;

(11)     Original and/or copy files, file notes, memoranda, correspondence, financial records and any other record or document relating to the financial performance of the Shell Benowa Self Serve franchise between 1 July 1992 and 20 June 1995 including but not limited to:

(a)       the financial performance of the workshop operating at the site,

(b)       comparison between the financial performance of the franchise as against other Shell franchises in the region of the Gold Coast and Brisbane,

(c)        comparison between the profit margin on fuel sales of the Shell Benowa Self Serve franchise as against other Shell franchises in the region of the Gold Coast and Brisbane,

(d)       comparison between the volume of sales of fuel and goods of the Shell Benowa Self Serve franchise as against other Shell franchises in the region of the Gold Coast and Brisbane,

(e)        comparison between the performance of the Shell Benowa Self Serve franchise as against other sites of other fuel companies in or around the Benowa region;

(12)     Original and/or copy internal memoranda, file notes, correspondence and other document or record relating to the decision by the Respondent to grant or consider granting an additional tenure to Mr and Mrs Bird and/or Deramone Pty Ltd with respect to the Shell Benowa Self Serve franchise;

(13)     Original and/or copy notes, memoranda, correspondence, file notes and any other document or record passing between the Respondent and Mr Llora in relation to the operation of the Shell Benowa Self Serve site between 1 July 1992 and 30 June 1995;

(14)     Original and/or copy notes reports, studies, analyses and any other document or record of the calculations made by the Respondent regarding the purchase price paid by the Respondent for the Shell Benowa Self Serve site pursuant to the agreement for sale of 20 December 1994.”

21                  On the hearing of the notice of motion the ACCC did not press for production of the documents listed in paragraph 11 of the schedule.

22                  Shell submitted that the subpoena should be set aside on three grounds :-

1.         the subpoena amounts to an application for further and better discovery;

2.         the subpoena is oppressive;

3.         the subpoena amounts to fishing.

23                  Although grounds 1 and 2 may often overlap, they are to be treated as separate grounds of attack:  Southern Pacific Hotel Services Inc v Southern Pacific Hotel Corporation Ltd [1984] 1 NSWLR 710 at 717.

Paragraph 1

24                  Shell objects to paragraph 1 on the ground that it seeks discovery of a specific document that, according to Shell, has already been discovered, or if not, was not in the possession, power or custody of Shell.  That is, its production ought to be sought by reference to a specific document identified in the list of documents or by an application for further and better discovery with supporting material.  It was not disputed that the documents have apparent relevance to the issues.

Paragraph 2

25                  Shell objects to paragraph 2 on two grounds.  The first ground is the same as that made against paragraph 1.  The second ground is that paragraph 2 is expressed too widely, particularly by use of the expression “any other document with respect to”.  Again it was not disputed that documents falling within the description would be relevant.

Paragraph 3

26                  Similarly, Shell complains that paragraph 3 seeks documents that have already been discovered and as such is an inappropriate means for making that request, or if not discovered, amounts to a request for further and better discovery and is therefore inappropriate.

27                  Shell also asserts that the paragraph is expressed too widely and the phrase “the decision of the respondent to convert petrol station sites in the Gold Coast region, including the Shell Benowa Self-Serve site, into Multiple Site operations and the means by which such conversion was to occur” touches upon matters without apparent relevance to any issue in the proceeding.  That is, Gold Coast service stations other than Benowa and the means of their conversion.  This latter expression is also said to be vague.

28                  The ACCC argue that as the time period is confined to January 1993 onwards, the burden on the recipient is reduced.  It is submitted that the documents are relevant as the ACCC assert that the conversion was the reason, despite the alleged representations of Mr Llora, Shell refused to grant a further five year extension and that the decision regarding multi-site operations was made by Shell prior to the alleged representations.  In those circumstances the ACCC argue that Shell did not intend to make good its representation.

29                  The ACCC also argue that the documents are relevant to the allegation that the franchise was not terminated because of poor performance by the Birds or because of economic downturn.

Paragraph 4

30                  Shell objects to paragraph 4 on the same grounds as paragraph 1.  The document was either discovered as part of the second schedule to the list of documents, that is documents no longer in Shell’s possession custody or control, or it is an inappropriate request.

31                  Neither party submitted that the document is not relevant.

Paragraphs 5, 6, 7 and 8

32                  Shell objects to paragraphs 5, 6, 7 and 8 on the same grounds as paragraph 2.  It was not submitted that the documents lacked relevance.

Paragraph 9

33                  Shell submits that on its face the request in paragraph 9 does not relate to any relevant issue in the proceedings, and in any event is too widely described.

34                  The allegations regarding Mr Llora in the amended statement of claim (paragraph 3) are that :-

(a)        Mr Llora was an employee, servant or agent of Shell;

(b)        Mr Llora was Shell’s representative for the Gold Coast region;  and

(c)        when negotiating the assignment of the franchise to the Birds and Deramone, Mr Llora was acting within the scope of his actual or apparent authority.

35                  By paragraph 2 of its amended defence Shell has admitted the allegations in paragraphs (a) and (b), and in relation to (c) has admitted that Mr Llora participated in discussions with the Birds in relation to the assignment of the franchise.  Shell submits that agency for all purposes relevant to this case is not an issue.

36                  The ACCC assert that Mr Llora’s authority (actual or apparent) to make representations is denied by Shell and the documents sought in paragraph 9 are relevant to that issue.  The ACCC also argue that the documents sought by paragraph 9 may not be discoverable, for example documents relating to Mr Llora’s credit.  These documents, the ACCC argue, must be produced on subpoena.

Paragraph 10

37                  Shell argues that the documents sought in paragraph 10 are not relevant to any matter in issue in the proceedings.  This submission was qualified by counsel for Shell.  It was said that the documents would consist of a very large number of documents that would be irrelevant, for example every time the Shell fuel truck delivered product to the service station or the Shell representative supplied accessories for the business.  It was conceded that there would be some relevant documents.  For example, documents recording a visit of Mr Llora.  Shell argued that the relevant documents would form only a tiny proportion of the total number of documents falling within the description in paragraph 10.

38                  The ACCC argue that the documents relevant to various site meetings are relevant.  This assertion was not challenged by Shell.

Paragraph 11

39                  The ACCC did not press for production of the documents described in paragraph 11.

Paragraph 12

40                  Shell objects to paragraph 12 on the same grounds as paragraph 2, and it again relies on the two affidavits of documents.

Paragraph 13

41                  Shell submits that paragraph 13 suffers from the same vice in paragraph 10 although not to the same extent.  That is, it contains documents of obvious relevance but also includes a vast volume of documents which have no bearing on the issues.  Shell say it is therefore too wide.  The ACCC answer this by saying that the documents requested have apparent relevance to the issues in the proceedings.

Paragraph 14

42                  Shell objects to paragraph 14 on the same grounds as paragraph 2.

43                  In response to Shell’s submission that the documents in paragraphs 1, 2, 3, 4, 5, 6, 7, 8, 12 and 14 have been the subject of discovery, or if not, ought to be sought by way of an application for further and better discovery, the ACCC argue that there has been no attempt by Shell to identify wherein the lists of documents these documents appear and it is not possible by reference to the broad wording of Schedule 2 to the lists to ascertain whether these documents are ones no longer in the possession, custody or power of Shell.  Schedule 2 in both of Shell’s lists of documents unhelpfully says :-

“1.       The originals of such of the copies referred to in Schedule 1 as were written by the Respondent or solicitors for the Respondent.

2.         The originals of such court documents as have emanated from the Respondent or solicitors for the Respondent.”

44                  The ACCC concedes that a subpoena cannot be used as an alternate means of discovery.  The ACCC submit that none of the paragraphs of the schedule seek further discovery, the documents have apparent relevance and the ACCC is entitled, either by way of notice to produce or subpoena, to production of those documents.

45                  In response to Shell’s complaint that paragraphs 2, 3, 5, 6, 7, 8, 9, 12, 13 and 14 are too wide because of the use of the words “with respect to”, “relating to” or “regarding”, the ACCC point to the decision of Waddell J in Spencer Motors Pty Ltd v LNC Industries Ltd [1982] 2 NSWLR 921 where his Honour said (at 929) :-

“Use of expressions such as ‘relating to’ need not result in there being any oppression or abuse of process.  It all depends on the context in which the expression is used.  For instance, it could hardly be objectionable to require a person to produce all ‘invoices’ relating to rules of a particular item to the defendant on a particular day.  The use of the word ‘invoices’ would restrict the potential width of the expression ‘relating to’.”

See also Greyhound Australia Pty Ltd v Deluxe Coaches Pty Ltd (1986) 11 FCR 592 per Pincus J.

46                  The ACCC submit that the words “with respect to”, “relating to” and “regarding” are confined or categorised by the words that follow, that is, the particular factual matter referred to in each of the paragraphs.  This categorisation, the ACCC submits, is sufficient to precisely define the documents being sought.  The ACCC submit that the recipient is not being asked to make a value judgment about the relevant issues in the proceeding, but is simply being asked (in the words of Smithers J in Lucas Industries Ltd v Hewitt (1978) 45 FLR 174 at 188) “to identify documents as relating to particular subjects” and that this “is quite a different task from that of ascertaining issues and identifying the relationship of documents thereto”.

Does the subpoena amount to a request for discovery?

47                  The principal submission made on behalf of Shell was that the subpoena procedure was inappropriate in the circumstances of this case and that the ACCC ought to have proceeded by way of an application for further and better discovery pursuant to O 15 r 8 of the Federal Court Rules.  That rule provides :-

“8.       Where, at any stage of the proceeding, it appears to the court from evidence or from the nature or circumstances of the case or from any document filed in the proceeding that there are grounds for a belief that some document or class of document relating to any matter in question in the proceeding may be or may have been in the possession, custody or power of a party, the Court may order that party -

(a)       to file any affidavit stating whether that document or any document of that class is or has been in his possession, custody or power and, if it has been but is not then in his possession, custody or power, when he parted with it and what has become of it;  and

(b)       to serve the affidavit on any other party.”

48                  In Commissioner for Railways v Small (1938) 38 SR (NSW) 564, Jordan CJ said (at 574 - 575) :-

“Where the subpoena is addressed to a party, it is still necessary that it should state with reasonable particularity the documents which are to be produced:  AG v Wilson;  Earl of Powis v Negus.  It is true that a party, unlike a stranger, can be required to give discovery;  but it is not legitimate to use a writ of subpoena duces tecum as a substitute for an application for discovery of documents, or as an alternative to an application for further and better discovery.  Discovery applications should be made at the proper time and place.  It would greatly impede the trial of actions at nisi prius, and impose an intolerable burden upon the presiding judge, if he were required form time to time to suspend proceedings and wade for himself through masses of documents for the purpose of endeavouring to determine whether any of them are relevant.  Especially is this so when the documents may be called for whilst the case is still at the stage when it is difficult or perhaps impossible for the Judge to know what may become relevant and what may not.  In the absence of special circumstances, eg Griebart v Morris [1920] 1 KB 659, a party is no more entitled to use a subpoena duces tecum than he is a summons for interrogatories, for the purpose of ‘fishing’, ie, endeavouring, not to obtain evidence to support his case, but to discover whether he has a case at all:  Hennessy v Wright 24 QBD 445 at 448, or to discover the nature of the other side’s evidence:  Briebart v Morris [1920] 1 KB 659 at 666.  Even if the documents are specified, a subpoena to a party will be set aside as abusive if great numbers of documents are called for and it appears that they are not sufficiently relevant:  Steele v Savory [1891] WN 195.”

49                  In a recent case dealing with an application to set aside a subpoena addressed to a respondent, Diddams v Commonwealth Bank of Australia [1998] FCA 497, Branson J said (at p 6 of her Honour’s reasons) :-

“However, the usual legal processes by which a party to a proceeding in the Court obtains access to the documents of opposing parties are the processes of discovery and inspection.  Where the court has by detailed directions set a timetable for the undertaking of the procedural steps necessary to bring a matter to readiness for trial, including a timetable for the discovery and inspection of documents, it is to be expected that the parties will seek such documents ‘relating to any matter in question between [them]’ as they wish to have access to through the process of discovery and inspection (O15 r2(2)).  If such documents are sought by subpoena or notice to produce issued close to trial, the Court’s endeavours to manage the process of the preparation of the matter for trial, and to ensure that no interlocutory issues are outstanding at the hearing date, may be subverted.

Order 15 rule 8 of the Federal Court Rules provides a procedure whereby particular discovery may be sought where a party is dissatisfied with the extent of discovery made by an opposing party.  The discretion given to the Court by O15 r8, and the requirement that, before any order may be made under that rule, it should appear to the Court ‘... from evidence or from the nature or circumstances of the case or from any document filed in the proceeding that there are grounds for a belief that some document or class of document relating to any matter in question in the proceeding may be or may have been in the possession, custody or power of [the] party’, ought not, in my view, to be able to be avoided by the simple device of serving a subpoena duces tecum upon an opposing party.

..... The rules of court do not place on judges the responsibility of determining for the parties which of their respective documents are required to be discovered.  Judges have not traditionally assumed such a role.  I do not consider that by choosing to issue a subpoena, rather than to seek an order pursuant to O15 r8 of the Federal Court Rules, a party should be able to achieve the result of placing such a responsibility on a judge.  Moreover, in this case it would have been inappropriate for the conduct of the trial to have been further disrupted by my being required to read documents produced in response to a subpoena called during the course of the taking of evidence.”

50                  The rationale for this principle is, in my view, that where a particular method has been prescribed by the rules for the achievement of the particular objective, such as the obtaining of further discovery conformably with the rules relating to discovery of documents espoused in Mulley v Manifold (1959) 103 CLR 341, it is impermissible to attempt to achieve that objective through the subpoena process.  This broader principle was applied by Beaumont J in Kizon v Palmer (1997) 75 FCR 261, in a case where the material sought to be produced via subpoena was prohibited from production in discovery.  On that basis the subpoena was set aside as an abuse of process.  This decision was affirmed on appeal (Kizon v Palmer  [1998] FCA 312, Northrop, French and Branson JJ). 

51                  Like the case before Branson J in Diddams v The Commonwealth Bank of Australia, this case has been the subject of a managed timetable and other than the issues raised by this subpoena and motion, the matter is ready for trial.  In those circumstances the ACCC should not be permitted to avoid the evidentiary onus required in O 15 r 8 in order to go behind two affidavits of documents provided by Shell by issuing a subpoena in this form.

52                  If the ACCC require further discovery or production of documents, which their initial notice to produce contemplated, then the appropriate course is to either specify the documents required by reference to the identifying number in the affidavit of documents, or to apply to the court for orders under O 15 r 8.

Is the subpoena oppressive?

53                  A subpoena is oppressive if it requires the recipient to make fine judgments regarding the relevance of documents:  Finnie v Dalglish (1982) 1 NSWLR 400;  Southern Pacific Hotel Services Inc at 718;  or if it requires a recipient to undertake a search of an excessively large amount of documents:  Commissioner for Railways v Small at 574, or does not specify the documents with reasonable particularity:  National Employers’ Mutual General Association Ltd v Waind and Hill [1978] 1 NSWLR 372;  Commissioner for Railways v Small at 574.

54                  The primary consideration is the due administration of justice and in particular this consideration manifests itself as a requirement that the parties have available to them all material relevant to the issues to be decided in the case:  Southern Pacific Hotel Services Inc at 720.

55                  In a practical sense this test was expressed by Beaumont J in Trade Practices Commission v Arnotts Limited (1989) 88 ALR 90 (at 103), asking two questions :-

1.         Do the documents requested have “apparent relevance” to the issues in the proceeding?  That is, does the subpoena have a legitimate forensic purpose?

2.         Is the subpoena seriously and unfairly burdensome or prejudicial?

See also Australian Competition & Consumer Commission v Australian Safeway Stores Pty Limited & Ors [1998] FCA 1599 at 7 - 8.

56                  The request in paragraph 1 of the schedule was made in paragraph 2(a) of the letter from the AGS to Minter Ellison dated 11 August 1997, paragraph 1 in the schedule to the Llora subpoena (although the date in the Llora subpoena is July 1993 not September 1993) and paragraph 2(a) of the notice of motion filed 1 September 1997.  Shell’s response is found in paragraph (a) of the letter from Minter Ellison to the AGS dated 21 August 1997.

57                  Similarly, paragraph 2 of the schedule corresponds to paragraph 2(b) of the 11 August 1997 letter, paragraph 2 in the Llora subpoena, and paragraph 2(b) of the motion.  Shell’s response is in paragraph (b) of the 21 August 1997 letter.

58                  Paragraph 3 corresponds to paragraph 2(c) of the 11 August 1997 letter, paragraph 2(c) of the motion and Shell’s response is in paragraph (c) of the 21 August 1997 letter.

59                  Paragraphs 4 and 5 correspond to paragraph 2(d) of the 11 August 1997 letter, paragraph 2(d) of the motion and Shell’s response is in paragraph (d) of the 21 August 1997 letter.

60                  Paragraph 6 corresponds to paragraph 2(e) of the 11 August 1997 letter (in part), paragraph 2(e) of the motion and Shell’s response is in paragraph (e) of the 21 August 1997 letter.

61                  It is arguable that other paragraphs of the schedule fall within the general requests in paragraphs 2 and 3 of the Llora subpoena.  For example, paragraphs 7, 8, 10 and 11 may be within paragraph 2 of the Llora subpoena;  paragraphs 12 and 13 may fall within the description in paragraph 3 of the Llora subpoena of documents “relating to the operation” of the business.

62                  The letter of 11 August 1997 concludes :-

“3.       This list is not intended to be in any way exhaustive and my client reserves the right [sic] request further particularisation of discovery should it consider that further discovery is not sufficient, upon the strength of the evidence it has that other documents are in existence and have not been discovered.  The above list represents the minimum of documentation my client would expect to exist in relation to this matter.

4.         My client requests that the Supplementary List of Documents be filed and served within seven days of the date of this correspondence, failing which it shall bring a Motion in the Federal Court seeking further and better discovery.  Any such Motion will involve an application by my client for the costs of and incidental to the Motion to be paid by your client and my client shall, in that regard, rely upon the contents of this letter.”

63                  Shell has provided a list of documents and a supplementary list of documents.  Its position is that discovery is complete.  That is, all relevant documents have been disclosed, or if they are not specifically listed in Shell’s two lists of documents, they do not exist or are not (or not at the time of the lists) in the possession, custody or power of Shell.

64                  Each paragraph of the subpoena, other than paragraphs 1, 10 and 13, fails to describe the documents requested with sufficient particularity or requires the recipient to make fine judgments regarding the relevance of the documents.

65                  Paragraph 1 has already been answered by the letter from Shell’s solicitors to the ACCC’s solicitors dated 21 August 1997.  As have paragraphs 2, 3, 4, 5, and 6.  Paragraphs 10 and 13 require the recipient to undertake a search of an excessively large number of documents. 

66                  In my view, the subpoena is oppressive and ought to be set aside.

Is the subpoena fishing?

67                  A subpoena will be set aside as fishing if it is designed not to obtain evidence to support the case but to discover whether there is a case at all or to discover the other side’s evidence:  Commissioner for Railways v Small at 575.

68                  Shell submit that because of the lack of particularity and wide range of the requests in the subpoena I ought to find that it amounts to a fishing expedition and is merely speculative.  In light of the findings I have made above that the subpoena ought to be set aside, it is not necessary for me to consider this submission further.

Conclusion

69                  The subpoena issued by the ACCC on 14 May 1998 will be set aside.  Costs will follow the event.

70                  Counsel for Shell submitted that if Shell was successful in obtaining an order setting aside the subpoena and was awarded costs, that an order should be made pursuant to O 62 r 3 that Shell ought to be at liberty to tax and collect their costs immediately.  This follows, it was submitted, because the issue and setting aside of the subpoena was a discrete issue in the matter and is now at an end.  In my view, as the subpoena was directed to a party to the proceedings it forms a natural part of the litigation as a whole and the issues raised by the subpoena and the application to set aside would have arisen if the ACCC had continued with its notice to produce.  There is no justification for ordering that Shell be at liberty to tax its costs immediately.

Associate:

Dated:              11 March 1999